After rumour reports last week that Time Warner had closed a deal to purchase MGM and the James Bond franchise, in a twist worthy of a Hollywood movie, Time Warner announced today that it was withdrawing its all-cash bid, and Sony Corp has agreed “in principle” to purchase MGM for $4.8 billion, ending a drama that started back in April when Sony first bid on the historic studio. MGM said its management will recommend the deal, which it called a “proposed merger,” to its board by Sept. 27.

Reports say Sony has agreed to pay $12 a share for the studio, which amounts to $2.94 billion. The deal also calls for Sony to assume about $1.9 billion in MGM debt. Sony, backed by Texas Pacific Group and Providence Equity Partners, raised its bid over the weekend, triggering Time Warner’s withdrawal. Key to Sony’s victory was the last minuet involvement of Comcast Corp., which put no money into the deal but agreed to package Sony and MGM content into a number of as-yet undetermined movie channels and video-on-demand offerings. Sony and Comcast announced that deal in a joint press release after news of the sale broke.

Sony is expected to fold MGM’s TV and film production units into Sony Pictures Entertainment. There will be a transition period to accommodate films in the MGM pipeline, but after 2005, that label and the roaring Lion will be put to rest.

Variety – 9/14/04

However, Variety reports that the James Bond franchise will be negotiated under a separate deal with the Broccoli family. The Variety report states that future Bond films will be handled by Sony, but will continue to be released under the MGM name. This means we will definitely see Leo the Lion giving his trademark roar in front of Bond 21 instead of the majestic “Columbia lady” which graces most Sony Pictures Entertainment productions (Sony Corp. bought Columbia Pictures in 1989 for $3.4 billion).

And speaking of Bond 21…

While MGM vice chairman Chris McGurk optimistically claimed Bond 21 was “ahead of schedule” back in April…it’s pretty clear now that the extended studio sale talks has set the film’s production back, or at least put a gag on official announcements regarding the project. With today’s news, one hopes Eon Productions are now free to release details on Bond 21, or at least put an end to the tidal wave of rumours. But it’s also conceivable that Bond’s new bosses will want to put their own stamp on the 40-year-old franchise first. Sony, after all, does have a curious history with 007.

In 1997, Sony announced it was going to produce a rival James Bond series utilizing rights acquired from Thunderball/Never Say Never Again producer Kevin McClory. MGM sued and prevailed in an out-of-court settlement which saw the studio awarded not only the disputed Thunderball rights (which included the use of Blofeld and SPECTRE), but also Columbia’s long-held rights to Casino Royale (elements of which are reportedly being used in Bond 21).

Sony transformed their Bond franchise concept into the Bond-bashing, extreme sport-loving xXx starring Vin Diesel (a sequel, xXx: State of the Union starring Ice Cube and directed by Die Another Day‘s Lee Tamahori, is set for release in 2005). But now it looks like Sony has finally realized their dreams of producing legitimate 007 movies.

Still unclear is whether any of MGM’s approximately 1,300 employees will survive the transition, including chairman and CEO Alex Yemenidjian and vice chairman/COO Chris McGurk.

This transaction marks the third time Kirk Kerkorian, who owns 74 percent of MGM (and tried unsuccessfully to merge it with Sony in 2001), has sold the studio.